In this video, you will learn about the fractals indicator on your MetaTrader platform, and how to use it in your forex trading. The pattern consists of 5 candlesticks. This pattern becomes more reliable in higher timeframes. If you use this indicator in a smaller timeframe, then you will get too many buy and sell signals.
There are two types of fractals, the up fractal and the down fractal. The up fractal is formed when the middle candlestick in the pattern is the highest compared to the highs made by other candlesticks in the pattern. For example, the left two candlesticks have their highs lower than the high of the middle candlestick. A down fractal is formed with the middle candlestick is the lowest. The left and right candlesticks have their lows higher than the middle one.
So, how to trade this pattern? You can look for the break of a up or down fractal. When price breaks through a fractal, think of it as a buy signal. You can take a long position with a stop-loss below the recent support. When down fractal breaks, then it is time to go short. Try to use this trading system on higher timeframes, to avoid fake signals.